I used to include a book review each month in my e-zine, but I stopped doing it. The main reason for this was that I found myself rushing to read a lot of books because they had a catchy title or there was a lot of buzz surrounding them. But unfortunately, their advice wasn’t helpful to me — and in some cases, the advice was just plain useless. After two months of reading several books before finding one worth reviewing, I decided to drop the feature. But this wasn’t a complete waste of my time, I actually learned quite a bit.
The biggest problem with many books is their main purpose is to simply sell a lot of copies. What this means is that they need to appeal to the masses, so they’re either oversimplified so that people without the proper background can understand them or they’re too general so they can appeal to a wider market. I don’t have a problem with people making the most out of our capitalistic society (in fact, I applaud them for doing so) but I do have a problem with authors putting out a product that is totally useless. And unfortunately, it seems like the majority of the new books I’ve come across related to wealth building have been far from helpful.
Why do so many books on finance include advice about how giving up your daily cup of coffee will make you a millionaire in 20 years? I haven’t had coffee since 1990 so I personally find this piece of advice useless yet some authors have multiple books on this very basic concept and allegedly sell thousands of books. While this is good advice, most of these books spend more time describing the daily habits of a fictitious individual that spends over $25 per day on breakfast and lunch than they do on what to do with that $25 per day that can be saved.
The secret formula for these books can be summed up as follows:
- Analyze your spending habits to find extra money to invest.
- Use something like direct deposit or weekly trips to the bank to ensure the money gets put away.
- Have a quality money manager manage your money (in other words, either stick it in a mutual fund or hire a financial adviser).
- Watch your money grow (there’s often an entire chapter dedicated to the miracle of compound interest).
- Retire early and enjoy life.
Now this will work if you have a secure high-paying job or an average paying job with a modest lifestyle (and the stock market has grown at a steady rate over the time of your investment). But there are a lot of situations that these books neglect to help you with such as:
- What to do when your monthly necessities exceed your income due to medical disability or job loss.
- How to cut expenses when you’re already living a frugal lifestyle.
- How to increase your income when cutting expenses won’t do.
- What to do if you don’t want to wait 20 years for financial freedom.
- How to invest your money (or make money) during a recession.
These are all questions that have come up in conversations discussing personal finance books that I’ve had in the last few months. It seems like there’s plenty of opportunity out there for would-be finance gurus.
Now, it should go without saying that any book that tells you that you can get rich without hard work, personal sacrifice or a lot of talent or intelligence will only make one person rich — the author.
Personal finance isn’t the only subject that’s prone to this type of useless advice. Real estate (no money down programs, house flipping, etc…) and personal development are genres full of books that make big promises that they don’t deliver on. Now not all books in these subjects are bogus, but many of them are so keep a sharp eye out.